LUX GULABRAI v CARL HAMER-MATHEW [1997] NSWCA 131

LUX GULABRAI v CARL HAMER-MATHEW SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MEAGHER, BEAZLEY and STEIN JJA

18 April 1997, 26 June 1997

[1997] NSWCA 131

torts — collateral abuse of process — arising from defence

FACTS

The respondent, an art dealer, instituted proceedings against the appellant seeking declaratory and mandatory relief and damages in respect of certain art works which it alleged were lent to the appellant. The proceedings were heard in the Supreme Court and the respondent was successful in obtaining the return of the art works. The respondent also argued that the appellant had committed the tort of abuse of process in the manner it had conducted its defence. Again, the respondent was successful and was awarded general compensatory damages and exemplary damages in respect of that tort. The appellant appealed on the issue of the tort of abuse of process.

HELD

1. There is no reason in principle, or as a matter of policy, why a defendant cannot commit the tort of abuse of process in the conduct of its defence.

2. In the case of the tort being committed by a defendant, the tort arises when the process used by the defendant is being used for the dominant purpose of effecting an object not within the proper scope of the litigation.

3. It is not necessary for the plaintiff to show that the defendant, in these circumstances, did not have an honest belief in its defence.

4. For the defendant to have committed the tort in conducting its defence it is not sufficient that it merely put forward an indefensible case which it knew not to be defensible.

5. A plaintiff can seek redress in respect of the defendant's tort (when the tort arises as a result of the conduct of the defence) during the proceedings in which the tort is said to have been committed without due process having been filed, provided the parties are adequately heard.